Tobacco Tax

The Department of Revenue administers Tobacco Taxes on cigarettes, other tobacco products, and snuff. Tobacco Tax laws are located in Chapter 138 of the Kentucky Revised Statutes.​

Tobacco Distributors​

The distribution of untaxed tobacco products without first obtaining a license from the Department of Revenue is prohibited.

Retailers are prohibited from buying untaxed tobacco products unless the retailer is a licensed retail distributor who directly pays the ​applicable excise tax on its purchase price of tobacco products to the Department of Revenue.​

Current Licensees

E-filing

The Department of Revenue will soon have electronic filing available through the KY Business One Stop Portal. We have information to assist you in creating the XML file layout necessary in creating your tax return. Please see the EDI Guide below as well as the technology guides containing examples of the file layout.

Pay Tobacco Tax

​Cigarettes

The cigarette tax is paid through the purchase of stamps from the Department of Revenue. These stamps must be affixed to each package of cigarettes as evidence that the tax was paid. The tax rate on packs of 20 cigarettes is 60 cents (proportionate rate for packs of 25).

Other Tobacco Products

Any smokeless tobacco products, smoking tobacco, chewing tobacco, and any kind or form of tobacco prepared in a manner suitable for chewing or smoking, or both, or any kind or form of tobacco that is suitable to be placed in an individual’s oral cavity, but does not include cigarettes or reference cigarettes.

Tobacco products, other than snuff and chewing tobacco, are taxed at the rate of 15 percent of the actual price for which the distributor sells the product. Retail distributors are taxed at 15 percent of their total purchase price of the untaxed tobacco products.

Snuff

Tobacco that is finely cut, ground, or powdered and is not for smoking. Snuff includes snus and dry snuff. Snuff is taxed at the rate of 19 cents per each 1-1/2 ounces or portion thereof by net weight.

Chewing Tobacco

Any leaf tobacco that is not intended to be smoked and includes loose leaf chewing tobacco, plug chewing tobacco, and twist chewing tobacco, but chewing tobacco does not include snuff. Chewing tobacco is taxed at the following rates:

19 cents per each single unit (net weight less than 4 ounces) sold. For retail distributors, the tax is levied on purchases of untaxed chewing tobacco at the same rate.

40 cents per each half-pound unit (net weight of at least 4 ounces but not more than 8 ounces) sold. For retail distributors, the tax is levied on purchases of untaxed chewing tobacco at the same rate.

6​5 cents per each pound unit (net weight of more than 8 ounces but not more than 16 ounces) sold. For retail distributors the tax is levied on purchases of untaxed chewing tobacco at the same rate.

If the container, pouch, or package on which the tax is levied contains more than 16 ounces by net weight, the rate that shall be applied to the unit shall equal the sum of 65 cents plus 19 cents for each increment of 4 ounces or portion thereof exceeding 16 ounces sold. For retail distributors the tax is levied on purchases of untaxed chewing tobacco at the same rate.

Master Settlement Agreement Tobacco Directory

KRS 131.610​ requires the Department of Revenue to provide a directory of all participating manufacturers and non-participating manufacturers that have been certified by the Attorney General as being in compliance with the Master Settlement Agreement and Model Act. The Department of Revenue will update the directory to add or remove a tobacco manufacturer or brand family that does not meet certification requirements as determined by the Attorney General. The Department of Revenue will notify wholesalers/distributors when there have been changes to the directory.

Pursuant to KRS 131.612, it shall be unlawful for any wholesaler/distributor to affix a stamp to a package or other container of cigarettes or distribute such cigarettes of a tobacco product manufacturer or brand family not included in the directory. Unlawfully stamped cigarettes will be considered contraband in the hands of the wholesaler/distributor and will be subject to seizure and destruction. Civil or criminal penalties may also be pursued against the wholesaler/distributor.

Cigarettes and “roll your own” tobacco that have been removed from the directory are considered contraband and will be subject to seizure and destruction even if a stamp had been applied.

If you have questions concerning the Master Settlement Agreement, certification or brands, please Email the Office of the Attorney General.

Tobacco Directories

The cigarette brands listed on the links below have been certified by the Office of the Attorney General as being in compliance with the MSA and Model Act. The Notice of Removal lists indicate manufacturers and brands that are no longer certified by the Office of the Attorney General as being in compliance with the Master Settlement Agreement and Model Act.